How will the budget affect the NHS?

November 2017

As a result of intense pressure, Philip Hammond has given the NHS money in the budget, but it is less than half the £4 billion that NHS leaders, including Simon Stevens, CEO of NHS England, Chris Hopson, CEO of NHS Providers, and lobbying organisations and health think-tanks, said is needed for next year to maintain the current standards.

What has been announced?

The Chancellor has promised an immediate £335 million to stave of a winter crisis. Then there will be a payment of £1.6 billion for the NHS in England in 2018-19, followed by £900 million extra in 2019-20. But, all the payments are one-off payments, they are not permanent additions to the NHS’s baseline budget.

The extra funding is targeted at reducing waiting lists and keeping to the four hour A&E target. Other areas of the NHS that are struggling, including mental health and primary care/GPs, have received no extra money. There is also no new money for social care, despite the obvious effect that lack of social care can have on the NHS and delayed transfers of care (DTOC).

Separately £3.5 billion will be made available for capital projects. This £3.5 billion is billed as part of a £10 billion injection of cash from the government for repairs and building new facilities; this is misleading as the rest of the £10 billion must be found by the NHS itself through selling off land or entering PFI deals. Selling land is a one-off deal - when it’s gone it’s gone - and PFI deals have been proven to be a very very expensive way for the NHS to raise funds.

In March 2018, £760 million of the £3.5 billion was allocated to infrastructure projects around England.

There is also the issue of NHS pay, this has been left in a state of uncertainty. It is possible that pay for nurses, midwives and other health personnel may rise next year, but it is unclear if doctors will see a pay rise.

How far does the budget go in helping the NHS?

The funding in the budget is at odds with what the government's own Office of Budget Responsibility (OBR) had considered to be necessary. Lawrence Dunhill at the HSJ tweeted a handy graph of just how different the funding given in the budget is from the funding that the OBR believes is needed over the next two years.

The verdict on the budget from those at the top of the NHS - the investment is welcome but falls far short of what is needed for the NHS to continue to deliver services. As a result the NHS is going to have to make difficult decisions, in other words rationing and an increase in waiting times.

And Claire Murdoch, CEO of Central and North West London NHS Foundation trust, tweeted:

The verdict from the think-tanks, which had said that £4 billion was needed, was also that the money is welcome but not enough as the NHS will continue to struggle.

Anita Charlesworth, Director of Research and Economics at the Health Foundation, said:

‘The level and speed of extra funding announced by the Chancellor today has exceeded expectations. The NHS was staring over a precipice - this is an important step away from the edge…..However, even with today’s announced investment, the NHS will be under considerable pressure. The extra capital and day to day funding amounts to around half of the £4bn of spending pressures facing the service next year. The NHS is outperforming the wider economy in productivity improvements, but will still face big challenges, not least a waiting list of four million people.'

And The King’s Fund noted:

‘The additional money for the NHS is a welcome shot in the arm as the service struggles to meet rising demand for services. But it is still significantly less than the £4 billion we estimate the NHS needs next year. Even with this additional funding, the NHS will struggle to meet key targets and provide the investment needed in services such as general practice and mental health…..We are disappointed, though, that the Chancellor did not find any extra funding for social care, which faces a £2.5 billion funding gap by 2019/20.’

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